Good Guy Ramanan tells us Lord Kaldor said this about Trade Deficits:
“If (a large trade deficit is) continued long enough it would involve transforming a nation of creative producers into a community of rentiers increasingly living on others, seeking gratification in ever more useless consumption, with all the debilitating effects of the bread and circuses of Imperial Rome”
This is a massively useful idea. Now that I heard this, I think about this all the time. I’d stress the point “creative producers” – making stuff has value outside of creating a meaningful life.
When you have a concentration of creative people making stuff, there are large synchronic effects. You never know what good stuff might happen. This Exorbitant Privilege isn’t all it’s cracked up to be. There are real costs.
We’ll have more about the trade deficit at some point, but wanted everyone to know the direction we’re heading.